Objective To determine whether upper gastrointestinal tract (UGI) bypass itself has beneficial effects on the factors involved in regulating glucose homeostasis in patients with type 2 diabetes (T2D). Methods A 12-month randomized controlled trial was conducted in 17 overweight/obese subjects with T2D, who received standard medical care (SC, n = 7, BMI = 31.7 ± 3.5 kg/m2) or duodenal-jejunal bypass surgery with minimal gastric resection (DJBm) (n = 10; BMI = 29.7 ± 1.9 kg/m2). A 5-h modified oral glucose tolerance test was performed at baseline and at 1, 6, and 12 months after surgery or starting SC. Results Body weight decreased progressively after DJBm (7.9 ± 4.1%, 9.6 ± 4.2%, and 10.2 ± 4.3% at 1, 6, and 12 months, respectively) but remained stable in the SC group (P < 0.001). DJBm, but not SC, improved: (1) oral glucose tolerance (decreased 2-h glucose concentration, P = 0.039), (2) insulin sensitivity (decreased homeostasis model assessment of insulin resistance, P = 0.013), (3) early insulin response to a glucose load (increased insulinogenic index, P = 0.022), and (4) overall glycemic control (reduction in HbA1c with fewer diabetes medications). Conclusions DJBm causes moderate weight loss and improves metabolic function in T2D. However, our study cannot separate the benefits of moderate weight loss from the potential therapeutic effect of UGI tract bypass itself on the observed metabolic improvements.